FX Markets Update The EM “carry trade” looks increasingly stretched Emerging markets (EM) currencies with high short-term yields – i.e., high “carry” – remain the strongest currencies against the US dollar this year, even if their gains over the past week have been... 14th July 2023 · 4 mins read
Global Markets Update How markets might fare as US disinflation continues June’s soft US CPI print seems to have given investors renewed hope that inflation could fall back to normal levels without the economy slowing too much, if at all. We continue to think that the... 13th July 2023 · 3 mins read
Global Markets Update Why don’t TIPS yields matter anymore? Not so long ago, a higher 10-year TIPS yield almost invariably meant an underperformance of US “growth” stocks vis-à-vis their “value” peers, a lower gold price, and a stronger dollar. That’s changed... 13th July 2023 · 5 mins read
FX Markets Update Intervention time: what next for the yen and the renminbi? China has stepped up its support of the renminbi and Japan appears to be edging closer to direct intervention to prop up the yen. While pressure from higher US interest rates may well continue in the... 7th July 2023 · 5 mins read
FX Markets Update We think the Brazilian real’s rally will reverse soon We expect the Brazilian real to reverse its gains against the US dollar by the end of the year as Brazil’s central bank eases policy and risk sentiment deteriorates. We are also sending this FX... 6th July 2023 · 4 mins read
Asset Allocation Update Making sense of asset flows and the yen Reconciling the slide in Japan’s currency with big flows into its stock market from abroad and a perception that the appeal of foreign bonds to Japanese investors has waned in response to high hedging... 30th June 2023 · 4 mins read
FX Markets Update The fall and fall of the Swedish krona The rapid depreciation of the Swedish krona has pushed the currency down to its lowest ever level against the euro. Worse still, we do not think the krona is significantly below “fair value”, nor do... 22nd June 2023 · 4 mins read
FX Markets Update China, OPEC+ & the prospects of commodity currencies Despite faltering commodity prices and growing concerns around China’s economic rebound, most commodity currencies have held up reasonably well this year. But we continue to think that will change in... 16th June 2023 · 4 mins read
FX Markets Update Won weakness likely to continue this year Dismal economic growth has established the Korean won as one of the worst-performing emerging market (EM) currencies against the dollar this year. We expect Korea’s bleak growth prospects and... 8th June 2023 · 4 mins read
Emerging Europe Economics Update Turkey needs a significant adjustment in the lira Signs that newly re-elected Turkish president Erdogan is willing to move away from unorthodox economic policies has led to an increase in investor optimism towards his country. These developments are... 7th June 2023 · 4 mins read
FX Markets Update We don’t expect the renminbi to weaken much further Despite the recent slowdown in China’s reopening recovery, we don’t expect the renminbi to weaken much further against the US dollar. Yield differentials should begin to tilt back in favour of the... 25th May 2023 · 4 mins read
Global Markets Update Crisis risks loom for Turkey’s financial markets President Erdogan looks set to secure victory in the second round of Turkey’s presidential election on 28th May. This Update sets out how we think this would play out in Turkey’s financial markets... 25th May 2023 · 4 mins read
Global Markets Update Debt ceiling debacle threatens renewed turmoil While banking sector strains have become less acute over recent weeks, core money markets remain tense as uncertainty grows around the potential fallout from even a temporary default on US Treasuries... 18th May 2023 · 10 mins read
FX Markets Update Why we continue to think sterling will depreciate We doubt sterling’s strong run will continue; we still think that an economic downturn in the UK and other advanced economies will lead to renewed downward pressure on sterling later this year. 12th May 2023 · 4 mins read
Asset Allocation Update Market implications of a potential debt ceiling crisis We don’t think long-dated Treasuries are bound to fare worse than the S&P 500 in the coming weeks, even as the risk of US sovereign default looms larger. In view of the wider interest, we are also... 11th May 2023 · 5 mins read
FX Markets Update We expect the euro to reverse course before long We think that the tailwinds supporting the rebound in the euro against the US dollar have largely run their course, and still forecast the EUR/USD rate to return to parity as advanced economies fall... 5th May 2023 · 4 mins read